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Gainers & losers: Stocks and sectors that moved the most on October 7

Money ControlMoney Control · 11m ago
Gainers & losers: Stocks and sectors that moved the most on October 7
Medial

1. Nifty 50 and Sensex ended in the red for the sixth consecutive session. 2. Natco Pharma's stock rose 3.4% after settling a US patent case over generic Ozempic products. 3. AU Small Finance Bank reported healthy loan and deposit growth, resulting in a 1.7% increase in its stock. 4. NBCC's stock jumped 3% on the ex-bonus trading day, following the announcement of a 1:2 bonus issue. 5. JP Morgan upgraded LTIMindtree to 'overweight', with a 13% upside potential. 6. Mphasis also received an upgrade from JP Morgan, with a target price indicating a 19% upside. 7. Reliance Power's stock continued to decline, hitting the lower circuit for the third consecutive session. 8. Suzlon Energy extended its losses for the eighth straight session following an advisory letter from stock exchanges. 9. Vodafone Idea's shares dropped 6% after the DoT issued a notice for non-payment of bank guarantees. 10. Kalyan Jewellers' stock fell around 1% as investors booked profits after strong Q2 business updates.

No hurry to sell, indefinite horizon on Zomato holding: Sanjeev Bikhchandani

EntrackrEntrackr · 1y ago
No hurry to sell, indefinite horizon on Zomato holding: Sanjeev Bikhchandani
Medial

Info Edge, India’s largest and most storied recruitment portal, has had a stellar run in the last three years with its portfolio company Zomato’s market cap surging almost 2.3X since its stock exchange debut. The firm’s bet on fintech unicorn Policybazaar is also paying off well. The company has made it clear it is in no hurry to book profits on these investments, even as it continues to nurse its own brands beyond Naukri to profitability. The firm, one of the few to survive the dotcom boom and bust cycle of 2000, has been led by founder and chairman Sanjeev Bikhchandani for a large part of this journey. And today, Bikhchandani has earned the right to be looked up to as the statesman for the sector. Entrackr caught up with Bikhchandani in his Gurugram office and he spoke on a range of topics including Naukri, Info Edge’s investments, serial entrepreneurs and corporate governance. Here are the edited excerpts. As a listed firm that carries a heavy overhang from its investment portfolio, does it worry you that it might impact the valuation of the core Naukri business? Not really. Institutional investors are smart. We give them adequate data so that they analyze Naukri thoroughly before making a conclusion about valuation. We don’t run Naukri for valuation every day or month or quarter. We look at how we create value for our shareholders in the long run. And that’s how we run our businesses. So, this hypothesis about our core or even group business doesn’t stand. Info Edge has been an investor in Zomato for over 14 years and despite the latter’s share price rising nearly 14o% from its listing price, Info Edge didn’t sell its shares. What level of return are you anticipating from Zomato? Actually, we don’t calculate Investment Return Rate (IRR). Info Edge invested in Zomato because of our conviction that it could become a great company. And if you are convinced about your conviction then it will happen. So, IRR is the happy incidental outcome of investing early behind companies that you want to help. That’s my belief. We are not in any hurry to sell and have an indefinite horizon. Every VC firm has a fund cycle and pressure to return capital to their limited partners but that’s not the case with Info Edge as you are investing from your own balance sheet. Could you elaborate on this? That pressure does not make this choice. We have a long term horizon and we call it patient capital. To be a successful early stage investor in India, you have to be quite patient because companies take anywhere between 10-15 years to go to IPO from seed stage. So if you have funds for only 6-10 years, you will not realize the full fruits of your investment. If you have a 20 year fund, you tend to perform better. However, such a horizon could be possible only when you’re investing from your own whole balance sheet. Do you believe that Blinkit could become bigger than Zomato? I think both are large but Blinkit is going to be fairly large. If we look at Zomato’s quarter-on-quarter numbers, online food ordering appears to have stagnated in top 10-15 cities. What’s your take on this? Obviously, there is the base effect. But, we don’t see stagnation. Also, you need to compare year-on-year, not quarter-on-quarter. When YoY numbers are compared, there is growth. I think full fiscal year performance is more important than quarter. We used to commonly hear about Naukri’s recruitment business that it was not the online presence, but your sales force or feet on the street that made the difference. Does that still hold true? Online sales have never been a big part of our strategy. When you want to sell more expensive products, you need face-to-face contact. At Naukri, we have clients whom we bill several crore rupees for annual subscription and such accounts need heavy offline touch. While the product will be consumed online, the stuff around it very often will be offline. Over the years, several players have tried to crack the recruitment business in the blue collar segment but most of them died. What are the challenges in the segment? Blue collar segment has broadly three challenges. First, it’s hyperlocal. The job seekers in this segment don’t move to different cities as they look for opportunities in and around their locality. Second, very often there isn’t a detailed text CV which makes the process slow and inefficient. Third, potential workforce in the segment do not search for jobs on the laptop and use vernacular languages. They are mostly on mobile. So you’ve got to adapt to all these things and still somehow get revenue and profit. We have been trying to get inroads in the blue collar segment for over two years now but we have just started monetizing it. Our future position in the segment depends on monetization. Some of the celebrated entrepreneurs are launching a second or third company without their first startup churning profit. How do you see this trend? I think this isn’t a progressive trend. As an entrepreneur, you need to focus on one thing and do really well. Once you’ve cracked that you can add on a second thing in the same company. Over the past couple of years, we have witnessed corporate governance issues with some startups. Even Info Edge saw serious lapses at 4B Networks. What’s your opinion about this? By and large, my belief is that 95-98% of Indian founders are genuine but there will be a few bad examples. Investors make sure that when something wrong happens in their portfolio, it is highlighted and actions are taken to ensure that such incidents do not repeat. Any governance issue isn’t good for anyone including limited partners, investors, founders and the startup ecosystem. What factors contributed to the lack of success with Info Edge’s e-commerce investments 99labels, MyDala, and Happily Unmarried? Limitation of raising foreign direct investment (FDI) and heavy investment into competition were two major reasons for failure of 99labels while MyDala had a product market fit (PMF) issue. Happily Unmarried is now a part of VLCC and we are still a shareholder there.

How Fampay's Rs 200 Cr bet on fintech for teenagers fell flat

EntrackrEntrackr · 1y ago
How Fampay's Rs 200 Cr bet on fintech for teenagers fell flat
Medial

Narratives are considered as important as the business plan for startups. And fintech startup Fampay sold its narrative very well. During the funding boom of 2021 it raised $38 million in what’s been one of the largest series A funding rounds. The firm’s pitch-to target the teens below 18 years of age found ready takers among venture funds, including Elevation Capital, Peak XV (formerly Sequoia Capital), General Catalyst. How things will pan out for a startup that’s high on narrative but low on core business fundamentals is anyone’s guess. An abrupt pivot From a peak of 10 million users in 2022, Fampay’s troubles stem from a single event – when IDFC Bank pulled the rug out from under it in February 2023 as its payments partner. This forced account holders to exhaust their balance within a short deadline. It was all downhill from there, as not only did Fampay lose its not-so-loyal users acquired at a high cost, but also struggled to recover from the blow. This is not the first time and won’t be the last time teenagers surprise those who thought they have figured them out. Fampay, however, is still struggling to come to terms with the losses it suffered. Two years after the mammoth fundraise, Fampay pivoted to become a UPI-focused app (TPAP like PhonePe and Paytm) in March 2023. The pivot was much needed for the survival of the firm which burnt over Rs 200 crore on the abandoned biz. The Bengaluru-based firm lost Rs 120 crore alone in FY23 with a single digit revenue figure. Numbers unmask the dud Fampay finally published its annual financial statement for FY23 with the RoC after a year-long delay. The five-year-old fintech firm reported Rs 7.7 crore in revenue. Income from commissions and partnerships accounted for 50% of the total operating revenue, which stood at Rs 3.8 crore in FY23. Meanwhile, payment facilitation brought in Rs 1.3 crore, whereas subscription fees added another Rs 2.8 crore to the company’s coffers. The Peak XV-backed firm’s employee benefits surged 2.95X to Rs 65 crore in FY23. This cost is more or less going to be much smaller in the following fiscal as the firm laid off some of its staff at all levels in April. Moving on, Fampay’s marketing spends jumped 2.7X to Rs 41 crore in FY23. The burn on legal, subscription, technology, traveling, and other overheads took the company’s overall cost to Rs 137 crore in the fiscal year ending March 2023 from Rs 51 crore in FY22. Importantly, the company extended an unsecured loan of Rs 55 crore to Pehe Limited to acquire Tri O Tech Solution Private Limited ( a wholly owned subsidiary of Pehe) with a PPI license, at a 6% interest rate for one year. However, after a year of non-payment, the timeline was extended, with the interest rate increased to 7.6%. With a marginal revenue and a baggage of mounting expenditures, Fampay’s losses surged 2.8X to Rs 120 crore in FY23 from Rs 43 crore in FY22. Its ROCE and EBITDA margin worsened to -67.4% and -700%, respectively. On a unit level, it spent Rs 17.79 to earn a rupee in FY23. Fampay has raised $48 million to date including its $38 million led by Elevation Capital in 2021. According to the data intelligence platform TheKredible, Peak XV, Elevation Capital, and Venture Highway are the notable investors in the company. Post pivot, Fampay entered the top 10 list of UPI-based payments apps in November last year. As per data published by NPCI, Fampay registered more than 50 million transactions through UPI in July 2024. It surpassed other apps such as BHIM, WhatsApp, MobiKwik and Flipkart UPI. Do or die, or just sell? A selloff, rather than survival, seems to be the plausible route Fampay is headed for, assuming that suitors are available for it. Having burnt so much on its original premise, even as the firm seems to have done a decent job of cracking the UPI payments code, it might be too little, too late. One would have to assume that the final throw of the dice for this firm is to do well enough on the UPI pivot, and show enough momentum for a suitor to consider it a worthwhile acquisition. Like many firms in the space, Fampay would have had a much better chance if the government/RBI had finally relented on allowing UPI providers some leeway on charging fees for their services, but until that division hangs in the air, the company might just hang up its boots in the business.

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